Imagine this: You are a member of a commission charged with recommending changes to the building code of a densely-packed urban city, say New York. Your recommendation is that high-rise office buildings are overly safe and that your city should relax its codes. That, more or less, is what happened in New York in 1968. Fifty-seven years after the Triangle Waist Company fire, in which 146 people trapped in the upper floors of an unsafe building burned, jumped, or fell from a collapsed fire escape to their deaths, New York City relaxed its safety rules for high-rise buildings.

In his outstanding historical account, "Triangle: The Fire that Changed America," David Von Drehle makes the cogent case that building-safety laws matter. And in their equally outstanding retelling of the 2001 World Trade Center attack from the perspective of those trapped inside the burning buildings, "102 Minutes: The Untold Story of the Fight to Survive inside the Twin Towers," Jim Dwyer and Kevin Flynn make the explicit case that we have forgotten this lesson.

The parallels between the books and the events they portray are remarkable. In each case, we are reminded of the incentives that cause developers to squeeze the maximum amount of rentable space onto each expensive square foot of urban land. We come to understand the competing stresses on city bureaucrats charged with drafting and enforcing safety rules for high-rise buildings. We are treated to careful descriptions of the structures that inevitably result from these economic forces and safety rules. And we then watch a pair of disasters unfold, two miles and ninety years apart.

Ben Barros

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Steven C. Bourassa (University of Louisville) and Martin Hoesli (University of Geneva) have posted Why Do the Swiss Rent? on SSRN. Here's the abstract:

At 34%, Switzerland has the lowest home ownership rate in Western Europe. This is a puzzle given the economic strength of the country. We use 1998 household survey data for five Swiss cantons to explore some possible reasons for this. We estimate a tenure choice equation that allows us to analyze the impacts of a number of key variables on the ownership rate. We pay particular attention to the relative cost of owning and renting, which is a function of house prices, rents, and the user cost of owning. The latter is a function of income tax policy and expected house price inflation, among other things. We also measure mortgage underwriting criteria and consider rent control and other policies affecting rental housing. By simulating a number of hypothetical changes to taxation and other policies, underwriting criteria, and price levels, we assess the importance of these variables in explaining the ownership rate. We conclude that high house prices - relative to rents and to household incomes and wealth - are by far the most important cause of Switzerland's low ownership rate.

Ben Barros

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Some readers might be familiar with the case of Steven Bixby, who was convicted of killing two police officers in dispute over South Carolina's use of eminent domain to take 20 feet of Bixby's land to widen a highway. From a CNN story on Bixby:

The 39-year-old man was convicted Sunday, after a five-day trial, of murdering the two officers. On Tuesday, the penalty phase of his trial begins; the same jury that convicted him has a choice of sentencing him to death or to life without chance of parole.

His family was upset because the state wanted to take about 20 feet of land near their home to widen a highway. Witnesses said Bixby and his father, who is awaiting trial on murder charges, had threatened to gun down any officer who set foot on their land. . . .

On the stand for the defense Saturday, Bixby's mother [testified:] "He has the right to protect his property by any means necessary." . . .

The 20 feet of land the family refused to give up has since been used to expand a highway that runs near the now-vacant home.

Ben Barros

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Miller v. Schoene approved the uncompensated destruction of cedar trees that were alternate hosts to a fungus that damaged apples but not cedars. Supreme Court Justice Harlan F. Stone’s opinion noted that deciding for either cedar or apple growers would amount to action by the state. Scholars have claimed that Miller marked the demise of the public/private distinction in constitutional law. This article presents historical evidence to the contrary. A widely-accepted standard—higher commercial value—commonly decided whose interests should prevail in such controversies. The analysis also shows that moral hazard explains why cedar owners were denied just compensation, which orchardists had originally been willing to tax themselves to pay. Cedar owners whose land actually gained in value when their trees were cut down nonetheless availed themselves of damages.

This is a must-read if, like me, you're a takings geek.

Ben Barros

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